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2015 DIGILAW 589 (ORI)

Gunjibadi LAMPCS Ltd. v. Controlling Authority

2015-10-15

B.K.NAYAK

body2015
JUDGMENT : B.K. Nayak, J. 1. The petitioner, Gunjibadi LAMPCS Ltd. has filed this writ petition challenging the order dated 26.10.2013 of the Controlling Authority under the Payment of Gratuity Act-cum-Assistant Labour Commissioner, Cuttack in P.G. Case No. 56 of 2006 (Annexure-1) and the confirming appellate order dated 03.07.2014 passed by the Appellate Authority under the Payment of Gratuity Act-cum-Deputy Labour Commissioner, Cuttack in P.G. Appeal No. 7 of 2013 (Annexure-2). 2. Opposite party No. 3 was an employee (Salesman) under the Tribal Development Co-operative Corporation Ltd. In its fair price shop at Baliguda with effect from 28.09.1973 and continued as such till 30.06.1979. In pursuance of circular No. 14285 dated 11.06.1979 of the Registrar, Co-operative Societies, Orissa the fair price shop along with the services of opposite party No. 3 and other staff of TDCC Ltd. were transferred and absorbed permanently under the petitioner with effect from 01.07.1979. Opposite party No. 3 continued as such under the petitioner and retired from service on superannuation on 31.07.2005. After his retirement, opposite party No. 3 applied to the petitioner-employer for payment of gratuity of Rs. 1,11,045/- claiming his last pay as Rs. 6,730/- per month. Opposite party No. 3 also raised the claim for gratuity before the Controlling Authority under the P.G. Act-opposite party No. 1. His claim was resisted by the petitioner on the ground that his last pay was Rs. 2,100/- per month and that the petitioner was only liable to pay gratuity of the period from 01.07.1979 till the date of retirement of opposite party No. 3. 3. The Controlling Authority by his order dated 31.08.2009 directed the petitioner to pay gratuity of Rs. 1,28,129/- for the entire period from 27.09.1973 till the date of his retirement accepting Rs. 6,730/- as the last pay of opposite party No. 3. In P.G. Appeal No. 11 of 2009 filed at the instance of the petitioner, the aforesaid order was confirmed and the appeal dismissed. The petitioner thereafter filed writ petition bearing W.P.(C) No. 17003 of 2011, which was disposed of by this Court by order dated 11.04.2013 setting aside both the original and appellate orders of the authorities under the P.G. Act and remanded the matter to the Controlling Authority to dispose of the same afresh. After such remand, opposite party No. 3 by his application dated 18.05.2013 submitted a revised claim of gratuity for Rs. After such remand, opposite party No. 3 by his application dated 18.05.2013 submitted a revised claim of gratuity for Rs. 39,980.76 on the basis of his last monthly pay at Rs. 2,100/-. He also claimed interest @ 10% per annum on the above gratuity amount for the period from 2005 to 2010 since the petitioner had already deposited gratuity amount of Rs. 31,500/- before the Controlling Authority in 2010. The petitioner resisted the claim stating that it was liable to pay gratuity for the period from 01.07.1979 to 31.07.2005 and not from 1973. The TDCC Limited, which was also impleaded as opposite party No. 2 before the Controlling Authority, filed its counter admitting the employment of opposite party No. 3 under it from 28.09.1973 to 30.06.1979 where after opposite party No. 3's service was transferred to the LAMPCS Ltd. (petitioner). It was further contended that after his retirement opposite party No. 3 has not applied to it for gratuity. It is further submitted that as per order in E.P. Case No. 7 of 1993-94, Rs. 72,000/- is to be realized from opposite party No. 3. 4. The Controlling Authority by his impugned order under Annexure-1 held that opposite party No. 3 was entitled to gratuity for the entire period of service from 28.09.1973 to 31.07.2005 from the present petitioner since as per the Government Circular the fair price shop and its assets and liabilities along with the services of opposite party No. 3 were transferred to the petitioner and therefore, the petitioner is liable to pay gratuity for the entire period. Accordingly, the Controlling Authority assessed the gratuity amount at Rs. 38,769/- and after adjustment of Rs. 31,500/- already deposited by the petitioner directed it to pay balance amount of Rs. 7,269/- along with interest @ 10% for the period from 19.05.2006 to 11.02.2010. The petitioner challenged the aforesaid order of the Controlling Authority before the Appellate Authority under the Payment of Gratuity Act-cum-Deputy Labour Commissioner, Cuttack, who dismissed the appeal and communicated the order to the petitioner under Memo dated 03.07.2014 (Annexure-2). 5. Learned counsel for the petitioner submitted that since opposite party No. 3 was an employee of the TDCC Limited (opposite party No. 4) from 1973-79, the petitioner is not liable for payment of gratuity for the said period. 5. Learned counsel for the petitioner submitted that since opposite party No. 3 was an employee of the TDCC Limited (opposite party No. 4) from 1973-79, the petitioner is not liable for payment of gratuity for the said period. Learned counsel for opposite party No. 4 has only reiterated the stand taken by it before the Controlling Authority. Learned counsel for opposite party No. 3 submits that there is no infirmity in the impugned orders passed by the authorities under the P.G. Act. 6. The only question that arises for consideration is whether the petitioner is liable to pay gratuity from 1973 till 30.06.1979 during which period opposite party No. 3 worked under opposite party No. 4. Sub-section (1) of Section 4 of the Payment of Gratuity Act, 1972 (in short, 'the Act') provides that gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,- (a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease. Whether termination of service of the employee is due to death or disablement continuous service of five years shall not be necessary as a requisite for payment of gratuity. Sub-section (2) of Section 4 of the Act provides for the manner of calculation of gratuity which is as under: "(2). Whether termination of service of the employee is due to death or disablement continuous service of five years shall not be necessary as a requisite for payment of gratuity. Sub-section (2) of Section 4 of the Act provides for the manner of calculation of gratuity which is as under: "(2). For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account: Provided further that in the case of [an employee who is employed in a seasonal establishment and who is not so employed throughout the year], the employer shall pay the gratuity at the rate of seven days' wages for each season." From the aforesaid provisions it is clear that gratuity shall be paid to the employee on the termination of service by superannuation or otherwise by the employer, calculated on the basis of wages last drawn by the employee concerned. 7. 7. Section 2(f) of the Act defines the term "employer" as follows: "(f) "employer" means, a relation to any establishment, factory, mine, oil field, plantation, port, railway company or shop- (i) belonging to, or under the control of the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned, (ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no persons has been so appointed, the chief executive officer of the local authority, (iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oil field, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;" From the aforesaid definition, it is crystal clear that the term "employer" does not include a past "employer". 8. A combined reading of the aforesaid provisions of the Act makes it clear that it is an employer under whom the employee superannuated shall be liable to pay gratuity to the employee calculated on the basis of last wages drawn by him. An employer under whom the employee was working years back before transfer of his service to another employer cannot be made to pay gratuity on the basis of the last wages drawn by employee at the time of superannuation. In the instant case, as per the Government order, the fair price shop of opposite party No. 4 with its assets, liabilities and services of opposite party No. 3, who was working in the said shop, were transferred to the present petitioner, who accepted the same without any objection. There is nothing in the Government order to suggest that the petitioner shall not accept the past liability of the employer. 9. In the light of the aforesaid discussion, it must be held that the petitioner is liable to pay gratuity to opposite party No. 3 for the entire period of his service. Therefore, there is no infirmity in the impugned order and accordingly the writ petition is dismissed.